The news that Merkle and other data providers are now offering some of the services characteristically offered by agencies raises a fewquestions. Is Merkle an agency? Is a platform like MediaMath an agency? Is IXI an agency? In short, the answers to these questions are yes, no, and no. What has happened in our industry is that, as anyone in the technology-driven and audience-centric programmatic segment of interactive can attest, the naming convention that many have been using for years has become all but moot.
The agencies of old are akin to redwoods: beautiful, massive trees that take decades to grow and can leave you in awe. But the rise in programmatic has created several smaller companies with the potential to fill many of the needs heretofore fulfilled by agencies. These smaller firms seldom compete with larger agencies. But, together, they are building an entirely new programmatic segment that is focused on audiences and efficiency.
There’s a larger forest of smaller trees now, all aimed at one goal: serving the client. It doesn’t have to take a large agency to do some of these services. Smaller marketing technology groups have proven themselves capable of much of this work. With the right technology and interoperability among other technologies, a business can serve marketers programmatically and efficiently with as few as three or four people.
This also opens the doors to faster industry change, something that advertisers will tell you is desperately needed in the agency world. An 11,000-person agency can’t simply tell its entire staff “we used to have these tools, now you have this one.” The kind of massive change in day-to-day work that takes time in the agency world can be implemented almost instantly by smaller programmatic outfits.
Disregard Old Models
The integration of data into digital advertising is no longer a choice; it’s a vital, tactical element in digital media, allowing for greater targeting and engagement. Any advertiser failing to take advantage of this tactic is likely wasting money. In some cases, data companies are acting as AOR to their clients, but in many others they’re partnering with a traditional agency to provide the client a more comprehensive service. The lines between and among data providers, agencies, buying services, and technology providers do not in any way resemble what they looked like just a few short years ago.
The goal of programmatic is not to offer marketers another point solution that becomes part of their media plan. In fact, it’s very much the opposite. Programmatic gives marketers — whether at the agency level, or the direct client — a technology that lets them own the media plan and understand what’s working. Programmatic is not competing with agencies, but instead with the status quo.
Remember SEM/SEO Shops?
Agencies aren’t going away, any more than ad exchanges or networks are going away. Did agencies go away after search became the dominant interactive media segment, and spawned thousands of “SEM-SEO agencies” in the U.S.? Of course not. Some adjusted, built and acquired, while others built strategic partnerships. Aegis bought iProspect, which made sense in this construct. But, when Hearst bought iCrossing, did it mean that Hearst was no longer a publisher? Or, did it simply mean that the old designations were no longer true in every case throughout the industry? The technology beneath these platforms is enabling innovation making old designations less relevant by the day.